Wal-Mart Tests New Video-Download Service

Wal-Mart Stores on Tuesday introduced a test version of its new video download service, making it the first major retailer to offer such a service with the backing of all of Hollywood's big studios.

The service, available on Wal-Mart's Web site, lets users download movies or television episodes that they can watch on their computers or portable media players, pitting the No. 1retailer against Apple's iTunes service.

Wal-Mart Goes Hollywood

Wal-Mart launched its long-awaited video download service today, and CNBC's Julia Boorstin has the details.

Wal-Mart said the download service includes more than 3,000 titles from movie studios like 20th Century Fox, Disney, Lions Gate, MGM, MTV Networks, Paramount Pictures, SonyPictures Entertainment, Universal Studios Home Entertainment and Warner Bros. and television networks including Comedy Central, Fox, and Nickelodeon.

The downloads are priced from $1.96 for episodes of television shows to up to $19.88 for new movies.

Retailers have been exploring ways to capitalize on the emerging market for downloading movies and TV shows from the Web. Last year, Wal-Mart announced a test of a service offering consumers who bought a physical DVD the option to download the film for an additional fee.

Wal-Mart said in the service being introduced on Tuesday, movie releases will be available for video download the same day the DVD is released.

The retailer said the service is powered by technology from Hewlett-Packard.

CNBC Markets Reporter Dominic Chu heard about a new business out of San Francisco that was getting a lot of buzz for being able to deliver anything, as long as it's legal, for a price. He put it to the test, right here in New York.